Draft decision to deny authorisation for exclusive pilotage agreement

The Australian Competition and Consumer Commission has issued a draft determination proposing to deny authorisation for an exclusive pilotage services agreement at the Port of Brisbane.

Under the agreement, Maritime Safety Queensland (MSQ) must acquire all pilotage services at the port from Brisbane Marine Pilots Pty Ltd (BMP) until 31 December 2013.

"The ACCC considers that the exclusive agreement will remove any potential competition to supply pilotage services at the Port of Brisbane by preventing other providers from entering that market," ACCC chairman Graeme Samuel said. "The ACCC has not been provided with any information to suggest that MSQ intends to put in place measures to introduce competition when the agreement ends."

The information available indicates that significant growth is forecast in ship movements over the next 10 to 20 years. Any resulting increase in demand for pilotage would increase the public detriment arising from the agreement.

Key industry bodies opposed the agreement on the basis it unnecessarily restricts competition.

The ACCC is not convinced that the proposed arrangement is necessary to deliver the public benefits claimed by the applicant.  With or without competition to provide pilotage, port authorities and marine pilots have an incentive to ensure these services are administered safely.

Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment. The ACCC's draft determination will be available from the ACCC website.

The ACCC invites submissions from interested parties in relation to the draft determination before making its final decision. Parties wishing to make submissions should do so by 22 October 2010. Please refer to the website for further information about making a submission.